Most people might consider the idea of an early retirement to be a “luxury.” Considering how it works for the majority of people, that’s not entirely unfair. Compared to working to and often beyond pension age, getting out of full-time work around or even before the age of 55 might sound like winning the lottery. However, as this blog details, it’s more than possible. What’s more, it might be the safer and more secure option in the long-run. Here are some of the risks of not making plans to retire early.
Being put out of work early
We all have good reason to be concerned for our health, including reasons well beyond the financial impact. However, though living standards allow us to live in better health as we grow older, our risk of getting seriously injured and sick and having to leave work because of it continue to rise. We can invest in protections like health insurance and long-term disability insurance, but denials do happen and the process of making claims can be long, costly, and put you in risk of debt. If that happens to you, partnering with a law firm may be the only solution. For example, partners like Darras Law can help get people back on track, but aiming for an early retirement helps you greatly lower your chances of having to need them. 19% of all people suffer a disability at some point in their lives. You have a 1-in-5 chance of being put out of work forcibly before you can leave on your own terms.
Rolling the dice on when you retire
Some consider it a purely hypothetical problem. But the fact is that there is always the chance that the retirement age, the age after which you qualify for a state pension, could rise before you reach it. This danger is particularly prevalent for those facing the age in the next ten-to-fifteen years. But it’s something we all have to contend with. The chances might not be high, but even the Social Security Administration admits that projected long-term program costs can be fully covered, as shown at Investopedia.
The opportunity cost
Planning to retire early isn’t just about gaining some financial independence and freedom. It’s about freeing your life to pursue your dreams. Without financial independence, our time is constantly torn between what we want to do and what we need to do. Even worse, some needs are sacrificed for the sake of the most basic. Time with your family, in the community, and on improving yourself for your own sake is all pushed into the margins by the need to sustain yourself. Of course, you don’t have to sacrifice the best years of your life in order to retire early. Aiming for early retirement allows you to figure out what your dreams are and spend your energy pursuing them.
An increased chance of living in financial distress due to injury, missing out on the parts of life you are constantly putting off, and even the risk of being forced out of your career only to work longer than you anticipated in a low paying job trying to makes ends meet are three dangers worth sincerely thinking about. Planning for an early retirement might be your only opportunity to escape them.
